Japanese Stock Futures, Australian Shares Fall Amid Fed Debate

Japanese stockfutures and
Australian equities fell after minutes of the Federal Reserve’s
meeting showed policy makers were divided about bond purchases
known as quantitative easing.

American Depositary Receipts of Toyota Motor Corp. (7203), a
carmaker that gets a quarter of its revenue in North America,
slid 0.4 percent from the closing share price in Tokyo.
Suppliers for Apple Inc. may be active in Asia as Foxconn
Technology Group, the manufacturer of products including the
iPhone, froze hiring in China. BHP Billiton Ltd., the world’s
biggest miner, fell for a second day, losing 3 percent, after
reporting yesterday that first-half profit plunged 58 percent.

Futures on Japan’s Nikkei 225 Stock Average (NKY) expiring in
March closed at 11,415 in Chicago yesterday compared with 11,440
in Osaka, Japan. They were bid in the pre-market at 11,430 in
Osaka, at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index
fell 0.6 percent today. New Zealand’s NZX 50 Index dropped 0.2
percent in Wellington.

“The Fed now is getting very nervous about the
continuation of its quantitative easing program,” said Matthew Sherwood, head of investment market research in Sydney at
Perpetual Investments, which manages about $25 billion. “If
they say they have to wind it down before the labor market
stabilizes, that would take one of the key supports away from
the market.”

Fed Minutes

Futures on the Standard & Poor’s 500 Index (SPXL1) rose 0.1 percent
today. The index fell 1.2 percent in New York yesterday, the
biggest drop since November, as minutes of the Federal Open
Market Committee’s Jan. 29-30 meeting showed policy makers were
divided about the strategy behind Chairman Ben S. Bernanke’s
program of buying bonds until there is “substantial”
improvement in a U.S. labor market.

Some said an earlier end to purchases might be needed, and
others warned against a premature withdrawal of stimulus.
Several policy makers said the central bank should be ready to
vary the pace of its $85 billion in monthly bond purchases.

The MSCI Asia Pacific Index advanced 11 percent from the
start of November through yesterday, led by Japanese shares as
Prime Minister Shinzo Abe pledged to beat deflation and pressed
the central bank to ease monetary policy. Asia’s benchmark
traded at 14.9 times estimated earnings as of yesterday compared
with 13.7 for the S&P 500 (SPX) and 12.5 for the Stoxx Europe 600
Index (SXXP), according to data compiled by Bloomberg.

The Bloomberg China-US Equity Index of the most-traded
Chinese equities in the U.S. dropped 1.1 percent to a two-month
low of 94.46 yesterday.